Chinese smartphone manufacturer Xiaomi rebutted a senior Huawei executive’s statements on Tuesday, asserting that the executive had presented a distorted account of facts. Yu Chengdong, overseeing Huawei’s consumer products and auto divisions, raised concerns about patent infringement during a company event last week, making a reference to “dragon bone” technology. The allusion was widely construed as targeting Xiaomi’s newly introduced foldable phone. Xiaomi, China’s No. 5 smartphone maker, quickly rebutted Yu’s claims on Tuesday, saying that its hinge design was wholly independent. He urged him to adhere to basic scientific standards and stop unfairly criticizing competitors.
The spat comes amid intensified competition in China’s smartphone market, with both Huawei and Xiaomi having redoubled their efforts in the high-end segment. The two companies have clashed before, most notably over the specifications of their smartphones’ cameras.
Despite their differences, Xiaomi and Huawei have worked together to develop and distribute applications for the Chinese mainland’s 5.5G mobile broadband network. The accelerated data transmission speeds of the new standard are expected to boost innovative factory productivity and enable a host of other services. On Tuesday, the companies also have a patent cross-licensing agreement in place, which Xu Ran, general manager of Xiaomi’s corporate business development and I.P. strategy department, said.
For Xiaomi, whose secret weapon combines cheap components and open-source Android software, the dispute with Huawei could be another blow to its global ambitions. The firm has been rising, snatching sales away from established rivals and expanding in emerging economies. It has six phones in the global top ten and is closing on Samsung, Apple, and other significant players.
Its strategy is selling high-end, reliable devices for about half the price of a Galaxy or an HTC One and shifting them online. Famously, it once shifted 150,000 phones in 10 minutes on WeChat. It also helps that Xiaomi has the backing of billionaire founder Lei Jun, a former Google exec.
Like its bigger compatriot Huawei, Xiaomi is accused by the Trump administration of being linked to Beijing’s military ambitions and has been added to a U.S. list of firms whose investments are restricted. That list includes semiconductor maker Semiconductor Manufacturing International Corp (SMIC).
The United States argues that SMIC and Huawei are re-directing funds from their customers to support the Chinese government’s economic and technological goals. Both companies have denied the allegations and accused the U.S. of retaliation for its trade tensions with China. The U.S. is not alone in its suspicions, with many European nations also questioning Huawei’s activities. The E.U. has restricted the company’s access to European telecom networks. Unlike Huawei, Xiaomi produces only consumer electronics and does not sell networking equipment. Over the past decade, it has also invested 977.3 billion yuan in various research and development programs, generating US$560 million in royalties from its intellectual property.
